1-Star Stocks Poised to Plunge: Renren?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese social networking platform Renren (NYS: RENN) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Renren's business and see what CAPS investors are saying about the stock right now.

Renrenfacts

Headquarters (founded)

Beijing, China (2002)

Market Cap

$1.5 billion

Industry

Internet software and services

Trailing-12-Month Revenue

$143.9 million

Management

Founder/Chairman/CEO Joseph ChenCFO Hui Huang

Trailing-12-Month Operating Margin

(46.3%)

Cash/Debt

$922 million / $0

Competitors

BaiduSINASohu.com

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 28% of the 258 members who have rated Renren believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, EvanBuck, succinctly summed up the bear case for our community:

Renren might look good, but it's an interesting case. Red thumb because anyway you slice it, [Renren] is a lose-lose: if China becomes more restrictive, less open, more communist, it can take out [Renren] in an instant. Even if China remains stable, the company's valuation is sky-high. If China magically turns into a free, open country, [Renren] will have competitors like Facebook, Twitter, etc. and lose its advantage.

If you want market-topping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another growth play we are incredibly excited about -- excited enough to dub it "The Only Stock You Need to Profit from the NEW Technology Revolution." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow theTrackPoisedToCAPS account.